Cardinal Operational Update

Cardinal Resources plc
08 May 2007


   CARDINAL RESOURCES PLC ISSUES OPERATIONS UPDATE

   LONDON - Tuesday, 8 May 2007                                               

   Cardinal Resources plc (AIM:CDL) ('Cardinal' or 'the Company'), an
   independent oil and gas exploration and production company operating in
   Ukraine, today provides an update on development drilling and production
   operations.

   GAS GATHERING AND SEPARATION FACILITY

   Construction activities on the gas gathering and separation facility
   continue with operations expected to commence by the end of the second
   quarter of 2007 as originally projected.

   The status of work to date on the project is as follows:

   Overall:

   • approximately 80% completed, estimated as follows:
       - Process area equipment and piping: 90% completed
       - Civil works: 95% completed
       - Electrical and Instrumentation works: 40% completed.

   Pictures of construction progress to date are available on the company's
   web-site: www.cardinal-uk.com.

   WORK PROGRAMME UPDATE

                                 2007 Work Program(1)
                                                                  1Q   2Q   3Q
   Gas Gathering and Separation Facility                               X
   DB licence area 25km sq 3D seismic survey                      X
   BC licence area 65 km sq 3D seismic survey                          X    X

   The following is the detailed status of the works to date:

   Bilousivsko-         Description of work            Timeline
   Chornukhinska (BC)   completed to date
   licence area
   
   Well #3A             Work completed.                 Tie in to the gas 
                                                        gathering and separation 
                                                        facility at the end of 
                                                        the second quarter.

   Well #13             The plunger lift operations     Tie in to the gas 
                        successfully completed.         gathering and separation
                        Switched to full automatic      facility at the end of 
                        operations after successful     the second quarter.
                        operations on manual and 
                        timer mode.

   Well # 111           Plunger lift equipment being    Production tests are 
                        installed.                      ongoing. If successful,
                                                        the well will be tied 
                                                        into the facility at the 
                                                        end of the second 
                                                        quarter.

   Well #110            Plunger lift equipment          The equipment delivery 
                        requirements have been          is expected in early
                        finalised.                      May and will be 
                                                        installed and
                                                        tied into the facility 
                                                        at the end of the second 
                                                        quarter.

   Well #17             Land use agreements have been   Forecasted completion by 
   Well # 9             granted. Final revisions are    year end.
                        being made to a contract to 
                        use a western style rig that 
                        would result in quicker and 
                        more effective workovers. 
                        Preparatory workover 
                        activities are underway.

   Well #13A            Land permit allocation has      The land permit 
   Well # 7             been delayed due to a recent    allocation is expected
                        land decree(2).                 to be granted before the 
                                                        year end.

   
   EXPECTED PRODUCTION PROFILE

   As stated on 20 March 2007, the Company expects net production to increase
   from approximately 800 boepd to a run rate of approximately 3,000 boepd by
   the end of 2007. This is now subject partially to availability of
   sufficient funds for 3 workovers planned in the second half of the year
   from the recommencement of JAA gas sales(3).

   3-D SEISMIC SURVEYS

   The 25km sq 3-D seismic survey on the DB licence area was completed within
   the budget in terms of both cost and time and identified one side track
   opportunity and two additional potential well locations in the area.

   The 3-D seismic survey over approximately 65 km sq of the BC licence area
   has begun as scheduled in April 2007. The field work and processing is
   expected to be completed in four months. The acquisition of a 3-D seismic
   survey over the proposed area will not only assist in exploitation efforts
   but also the refinement of future development drilling locations. It will:

   • enhance the ability to direct development wells to the optimal subsurface
     locations

   • guide the efforts to expand the development potential of the area by
     substantially increasing the quality of known locations and the
     probability of identifying additional locations.

   The Company is also considering a 35 km sq 3-D survey on the NY licence
   area for the third quarter and completion by the year end.

   OIL AND CONDENSATE SALES

   Oil and condensate sales and production volumes for the first quarter were
   both above the budget. Prices were at and above those internally projected
   and not subject to any restrictions. 

   JAA GAS SALES

   As announced in a press release dated 13 February 2007, a resolution of
   The Cabinet of Ministers of Ukraine had amended an existing regulation on
   fixed pricing of gas sales by state-owned companies to extend the scope of
   the regulation to potentially include Joint Activity Agreements with those
   entities. As previously announced - the Ministry of Fuel and Energy has
   verbally informed the Company that its net portion of JAA production will
   not be affected but Cardinal has sought further written clarification on
   the actual implementation of the resolution and, as a precaution, has
   elected with its partner Ukrnafta to transfer all JAA associated gas
   production to storage for future sales at higher prices. Free market
   prices are approximately 2 to 3 times those of controlled prices

   No further written clarification has been received regarding the near term
   effect of proposed new legislation. Cardinal has therefore also elected
   with its other JAA partner Ukrgaz to transfer all production on JAA 429 on
   the BC Field to storage. 58,542 boe of Cardinal's share of JAA gas
   produced in the first quarter of 2007 from both the RC Field and the BC
   Field JAA 429 has been placed in storage for future sale and Cardinal will
   continue to store all JAA gas produced until satisfactory clarification is
   received.

   To resolve the current issue Cardinal is:

   • negotiating its own direct marketing arrangements for RC Field JAA gas
     sales and BC Field JAA 429 and

   • continues to seek clarification on implementation of the amended
     regulation.

   Following the announcement of possible renewed elections in Ukraine
   further delays may now be encountered before further clarification is
   received

   Now that all of Cardinal's JAA production is being placed in storage, this
   affects approximately 80%(4) of Cardinal's current oil and gas production by
   volume. Monthly sales and EBITDA/cash flow have been reduced by
   approximately US$450,000 and $360,000 respectively(5). However sales may be
   made at any time at controlled prices.

   Cardinal believes that the decision to store JAA gas production, although
   impacting on cash flow and working capital in the short term, will be of
   benefit to the Company once clarification is received and arrangements are
   made to sell the gas at the higher free market price.

   Although storage of JAA gas has an adverse effect on the cash flow at
   present, this should be offset by the increase in production from the BC
   licence area upon completion of the gas gathering and separation facility
   at the end of the second quarter. All projected production enhancements in
   non-JAA portion of the BC licence area which are enabled by the completion
   of the gas facility will be free from such price restrictions and are
   expected to be sold at free market prices.

   Cardinal will continue to concentrate its present development efforts and
   current production increase programme on licences that it owns 100% and
   operates, until the economics of JAA well activities are clarified.

   Silver Point Capital has granted a waiver to covenants to reflect the
   present shortfall in cash flow due to the suspension of JAA gas sales.
   
   Notes

   (1)This press release contains certain forward-looking statements. These
   statements relate to future events or future performance and reflect
   management's expectations regarding Cardinal's growth, results of
   operations, performance and business prospects and opportunities. Such
   forward-looking statements reflect the Directors' current beliefs, are
   based on information currently available to the Directors and are based on
   reasonable assumptions as of this date. No assurance, however, can be
   given that the expectations will be achieved. A number of factors could
   cause actual results to differ materially from the projections,
   anticipated results or other expectations expressed in this press release.
   While Cardinal makes these forward-looking statements in good faith,
   neither Cardinal, nor its Directors and management, can guarantee that the
   anticipated future results will be achieved.

   (2)On 19 December 2006 Ukraine adopted amendments to the Land Code, which
   are effective for 2007. These amendments (specifically, Article 15 of the
   Code) forbid any changes of the purpose of use of agricultural lands such
   that agricultural land should remain as agricultural land, and can not be
   used for other purposes, other than social needs. These amendments will
   not be effective after 31 December 2007 unless extended.

   (3)The table set out below summarises the Company's expected production
   profile for the second half of 2007 and is based on the following
   assumptions: (i) current production rates of approximately 800 BOEPD from
   existing producing wells continue at the same rate; (ii) successful
   completion of Cardinal's new gas processing plant and tie-in to existing
   Ukrainian pipelines; and (iii) the current well workover programme
   continuing to progress according to plan and (iv) recommencement of JAA
   gas sales at market prices. Production estimates are based upon (v) the
   Company's assessment of recent test results of wells ready to tie into
   production; and (vi) the Company's interpretation of historic records of
   test results from the early 1980s for workover wells drilling and or to be
   drilled. A number of factors, such as technical difficulties in completion
   and or tie-in could cause actual production to differ materially from
   current expectations. The expected uplift in daily production does not
   include any additional uplift that could arise in the event that Cardinal
   consummates the RC re-instatement.

   Projected Net Production Rate at 31 December 2007 boepd (000s)

   March 2007 run rate                     0.8
   Ready to tie-in                         1.4
   3 workover wells to be completed        0.8
                                          ____
   Expected December 2007 run rate         3.0
                                          ====

   (4)The shift from 20% (as previously announced on the 13 February 2007) to
   80% is explained by the management's decision to store all gas production
   from all JAA licence areas for future sale at the higher market price when
   the price restriction is waived. The previous statement was based upon
   December 2006 data whereas the latest statement is based upon March 2007
   data.

   (5)Estimates of monthly sales, and EBITDA/cash flow by the Directors are
   based upon March 2007 production and December 2006 approximate realised
   prices and costs.

   Glossary of Terms

   boe                Barrels of oil equivalent
   boepd              Barrels of oil equivalent per day
   BC licence area    Bilousivsko-Chornukhinska licence area (also known as
                      Rudis)

   DB licence area Dubrivska licence area
   RC licence area Rudivsko-Chernovozavodske licence area
   NY licence area North Yablunivska licence area

   Cliff West, Executive Vice President and Chief Operating Officer of
   Cardinal (Member of the American Association of Petroleum Geologists -
   Certified Petroleum Geologist # 1563) is the qualified person that has
   reviewed and approved the technical information within this press
   announcement.


   For further information please contact:

   Cardinal Resources                        Brunswick Group
   Charles Green / Natalia Egorova           Paul Scott
   [phone]                      [phone]
   [e-mail]        [e-mail]

   Nominated Adviser
   Nabarro Wells & Co. Limited
   John Wilkes / Marc Cramsie
   [phone]
   [e-mail]


   Notes to Editor

   Cardinal Resources plc is an independent oil and gas company engaged in
   the acquisition, development, production and exploration of oil and
   natural gas properties in Ukraine. Cardinal is an experienced operator in
   the country focused on expanding its existing operations through the
   farm-in or acquisition of additional upstream oil and gas assets that can
   be further developed through the application of modern technology and
   expertise.





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